Homeowners face wide variation in care fee help

Widespread disparities continue in the way councils help homeowners who need permanent residential or nursing care, LGC research has found.

While some authorities are offering support to hundreds of residents to stop them being forced into selling their homes to cover the cost of care, others are making little or no use of the government’s preferred system of aid.

According to 131 responses to a Freedom of Information Act request sent to 151 upper-tier authorities, councils had at least £65.6m tied up in interest-free loans to residents in 2008-09.

However, the number of Deferred Payment Agreements (DPA) - the government’s preferred form of aid - and the amount being loaned varied hugely.

Compared with figures released last year by the Conservatives, LGC’s research indicates slightly more councils made use of DPAs in the most recent full financial year, with the number saying they made no new agreements dropping to 19 in 2008-09 from 24 the year before.

The number of instances in which councils disregarded the value of a resident’s home in deciding whether to make them pay care home charges - an alternative method of financial assistance - rose from 716 in 2007-08 to 792 in 2008-09.

However, fewer local authorities appeared to be offering such help. The number of councils confirming they had offered discretionary disregards dropped from 55 in 2007-08 to 45 in 2008-09.

The South West provides one example of the wide variation in the use of DPAs. In 2008-09, Devon CC made 119 new DPAs, Somerset CC 187, but Cornwall CC just three. Broadly similar numbers of residents were placed in residential care in each county during that period.

Fourteen councils, meanwhile, made no new DPAs in 2008-09, while five other councils said they did not offer them at all, preferring other methods of assistance.

The Department of Health urges councils to enter into DPAs with cash-poor homeowners who need permanent care or nursing home places. This effectively entails councils providing interest-free loans secured against the future sale of the property.

A DH circular last year warned councils that the local government ombudsman had found maladministration where a council had not introduced a deferred payments scheme within a reasonable period of time.

But many authorities prefer to use alternative methods under the Health and Social Services and Social Security Adjudications Act to recover care costs from property-owning residents, which is traditionally seen as a hostile approach.

Research from the Resolution Foundation thinktank (See comment, below) found some authorities presented DPAs as a last resort. At least one was understood to only offer residents the option if they could prove they had enough equity in their home to fund four years of care.

Some councils were said to view the cost of setting up deferred payment agreements as prohibitive, compared with recovering costs directly from residents.

The foundation, which targets issues affecting those on low incomes, is calling for councils to be more consistent in their use of DPAs, but also to combine their wellbeing and adjudications act powers to help residents unlock more of the equity in their homes to pay for lower-level care needs.

Sarah Pickup, honorary secretary of the Association of Directors of Adult Social Services, said that while there were variations in the way councils chose to use DPAs, authorities had other ways of helping property owners cover the cost of residential or nursing care.

“Authorities have a duty to notify people of the possibility of deferred payments, but they don’t have a duty to offer them,” she said.

She added that using DPAs should not be seen as a blanket way to help people pay for their care needs, and that councils that make less use of them could be opting for more informal arrangements.

“In some cases it is a cashflow issue,” she said. “But in the current situation it is not a bad way of using your money.”

John Dixon, director of adult services at West Sussex CC said differing stances on DPAs were likely to be a result of councils’ “corporate approach” to the financial assistance they offered to residents entering care.

Stephen Burke, chief executive of Counsel and Care, said the charity was concerned that some councils operated a blanket policy to refuse DPA requests.

“If more people are forced to sell their homes well under the market value to realise a quick sale, less money will be available to pay for care and more people will apply to their council for funding in the future,” he said.

Care services minister Phil Hope said all local authorities were “expected” to operate a deferred payments scheme, with agreements “decided on a case-by-case basis at the local level”.

Older low-income households with long-term care needs often find themselves in a funding gap: too asset-rich to get council support (because they have more than the threshold of £23,000 of equity in their homes) but too income-poor to adequately pay for the care services they need.

Councils are boosting capacity in their legal departments following previous cuts as they face challenges arising from new models of service delivery, commercialisation and pressures in adult and children’s social care, LGC research can reveal.

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